Volatility continued in early afternoon trade as key benchmark indices further trimmed gains and hit fresh intraday low in positive terrain. At 12:20 IST, the barometer index, the S&P BSE Sensex was up 35.68 points or 0.13% at 28,087.54. The Nifty 50 index was currently up 16.55 points or 0.19% at 8,655.05. Indian stocks rose today, 1 August 2016 on firmness in Asian stocks and as a private survey indicated improvement in India's manufacturing activity in July.
The Sensex gained 9.34 points or 0.03% at the day's low of 28,061.20 in early afternoon trade. The barometer index rose 232.99 points or 0.83% at the day's high of 28,284.85 in morning trade, its highest level since 10 August 2015. The Nifty gained 5.80 points or 0.06% at the day's low of 8,644.30 in early afternoon trade. The index rose 72.80 points or 0.84% at the day's high of 8,711.30 in morning trade, its highest level since 16 April 2015.
In overseas stock markets, Asian shares rose as the chances of a US interest-rate increase diminished, after the nation's economic growth for the second quarter came in below expectations. The odds of a September US interest rate rise dropped to 12% from 18%, Fed Funds futures data showed, after the US economy grew at just 1.2% in the second quarter from a year earlier, well below estimates, data showed on Friday, 29 July 2016. Low US interest rates could support demand for emerging-market assets.
In mainland China, the Shanghai Composite was currently down 0.85%. In Hong Kong, the Hang Seng index was currently up 1.39%. China's official manufacturing purchasing managers' index slipped below 50 in July, indicating a contraction in the nation's factory activity for the first time in five months, official data showed today, 1 August 2016. The index fell to 49.9 in July from 50.0 a month ago. China's official nonmanufacturing purchasing managers' index, a gauge of activity outside factory floors, climbed to 53.9 in July from 53.7 in June, the National Bureau of Statistics said today, 1 August 2016. A reading above 50 indicates an expansion, while a figure below that level indicates a contraction.
Strong earnings from Amazon and Google parent Alphabet lifted US stocks mostly higher on Friday, 29 July 2016, countering a disappointing report on second-quarter US economic growth.
Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 1,255 shares rose and 1,209 shares declined. A total of 142 shares were unchanged. The BSE Mid-Cap index was currently up 0.44%. The BSE Small-Cap index was currently up 0.35%. Both these indices outperformed the Sensex.
Telecom stocks edged higher. Bharti Airtel (up 0.48%), Tata Teleservices (Maharashtra) (up 0.44%) Reliance Communications (up 0.01%) and Idea Cellular (up 0.19%) gained.
Shares of Bharti Infratel gained 1.37%. Bharti Infratel is a provider of tower and related infrastructure and is a unit of Bharti Airtel.
Cement stocks also gained. ACC (up 0.49%), Shree Cement (up 0.52%), Ambuja Cements (up 0.22%), and UltraTech Cement (up 0.92%), gained.
Grasim Industries advanced 1.85%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
India's largest engineering and construction major by sales L&T dropped in volatile trade after announcing results. The stock dropped 2.47% to Rs 1,519.50. The stock was volatile. The stock hit high of Rs 1,584.95 and low of Rs 1,516.95 so far during the day. The company's consolidated net profit rose 46% to Rs 610 crore on 9.1% growth in gross revenue to Rs 21874 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours on Friday, 29 July 2016. L&T's consolidated order book increased by 8% on year-on-year (YoY) basis to Rs 2.57 lakh crore as on 30 June 2016. International order book constituted 29% of the total order book.
On future business outlook, L&T said that on the international front, the company will continue to target select prospects in the space of core infrastructure and oil & gas sector in the Middle East, Africa and other neighboring countries. The company said it has recently finalised its strategic plan for five years with a focus on profitable growth. L&T said it remains well placed to benefit from emerging opportunities with its execution capabilities and leadership position in various sectors.
Separately, L&T announced during market hours today, 1 August 2016 that it won orders worth Rs 1167 crore across various business segments.
Cipla gained 0.1%. The company announced that it has appointed Kedar Upadhye as the Global Chief Financial Officer of the Company effective 1 August 2016. The announcement was made during market hours today, 1 August 2016. With Kedar joining Cipla and assuming the responsibility of Global CFO, Umang Vohra will cease to be the Global CFO of the company. Umang will continue to be the Global Chief Operating Officer, Cipla said.
IRB Infrastructure Developers rose 0.79% after the company announced that it has emerged as a preferred bidder for national highway project of six laning from Udaipur to Rajasthan/Gujarat border in Rajasthan and Gujarat states on Design, Build, Finance, Operate, Transfer (DBFOT) basis. The estimated project cost of the company is approximately Rs 2100 crore with the concession period of 21 years including construction period of 910 days. Subject to award of this project, IRB Infrastructure Developers' construction order book will stand increased to approximately Rs 10000 crore, to be executed in the next four years. The company will get tolling rights on the project in a future date. The latest order will boost the company's construction order book visibility for the next three to four years, IRB Infrastructure Developers said in a statement. The announcement was made after market hours on Friday, 29 July 2016.
Meanwhile, Markit Economics said today, 1 August 2016, that the performance of India's manufacturing economy continued to improve in July, with a stronger expansion in new business contributing to faster increases in output and buying levels. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index-a composite single-figure indicator of manufacturing performance rose to a four-month high of 51.8 in July from a reading of 51.7 in June-indicating a further improvement in overall business conditions across the sector. The upward movement in the headline index came from stronger contributions from four of its five components, the exception being suppliers' delivery times.
Meanwhile, investors are awaiting the progress on the Goods and Services Tax (GST) constitutional amendment bill in parliament. According to reports, the government on Friday, 29 July 2016, listed the much-awaited GST bill for consideration and passage in Rajya Sabha's agenda for this week. Minister of state for parliamentary affairs Mukhtar Abbas Naqvi, while making a statement regarding government business for the week starting 1 August in the Upper House, reportedly said that the GST constitutional amendment bill will be taken up for consideration and passage in the Rajya Sabha. The government is keen to get the GST Bill approved during the Monsoon Session of Parliament ending on 12 August 2016.
The GST bill, which has been approved by the Lok Sabha, is pending in the Rajya Sabha because of opposition to the bill in its current form by the Congress party. A constitutional amendment bill requires at least 50% attendance and support of two-third of those present and voting in the house. For the GST bill to become a law, the bill also needs to be approved by half the state assemblies after its passage in the parliament. GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. The GST seeks to create a seamless national market in the country by replacing plethora of state taxes and central taxes by one tax.
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